In a report on the top trends for 2009, the market research firm focused on the impact of financial insecurity on consumer habits and spending. The trend landscape is shifting and because consumers will have fewer dollars to spare moving into 2009 it is imperative to respond quickly.
"People around the world are feeling insecure and are already looking to reestablish a sense of stability in their lives,” said Joan Holleran, director of research at Mintel. “In the coming year, it will be more important than ever for businesses to respond quickly and creatively to changing consumer needs and desires, as we all become more selective in how we spend our money.”
The most obvious consequence of the current economic situation is that consumers will be looking to trade down. Some commentators had suggested that the beauty industry would be protected from this trend but recent financial results suggest cosmetic companies are not immune to the economic downturn.
Companies operating in the middle market are likely to suffer the most as they face tougher competition from cheaper private label products.
Nonetheless Mintel said opportunities for growth remain. Faced with insecurity consumers will need to indulge in small affordable luxuries such as a favorite moisturizer.
They will also be attracted to products that soothe, energize or simply lift the spirits so playful distractions such as neon make-up were tipped to do well in 2009.
In tougher economic times consumers are also likely to spend more time at home so cheaper home-based alternatives to previously pursued luxuries are likely to do well. Beauty products that bring a spa-like feel to the bathroom were cited as an example.
Another key word for 2009 is trust. Confidence in consumer products has been eroded in recent times with crumbling economic markets fueling suspicion and doubt already at a high point following high profile health and safety scares.
Long-established brands will be well placed in this environment. Otherwise being sensitive to current consumer sentiment and operating in an open and transparent fashion will help restore confidence.
This approach will also be beneficial because consumers are also leading fast-paced lives and are therefore keen for companies to communicate with them in a straightforward and honest fashion.
To ease to the stress of busy lives convenience and simplicity will be increasingly sought after. Mintel said fresh, clean and pure will become essential values for consumer product companies and clear ingredient labels and product positioning will be important assets.